As US financial regulators intensify their crackdown on cryptocurrency companies, Binance CEO Changpeng “CZ” Zhao has stated that his company will hold off on plans for potential investments in the country.
In a tweet sent on February 17, Mr. Zhao, better known as CZ in crypto circles, fixed that Binance had pulled out of some potential investments or offerings in bankrupt crypto companies in the US for the time being.
Binance Chief Questions Misleading Report
CZ clarified after reports surfaced that the crypto exchange would be completely disconnecting from all of its US-based partners and projects. The initial report quoted an unnamed source as saying that Binance was considering cutting ties with US banks and financial services companies in light of heightened regulatory scrutiny of the cryptocurrency business.
The report further hinted that Binance was reassessing its venture capital investments in the US and was considering detokenizing any US-based crypto projects, including Circle’s USD Coin (USDC).
Binance has long insisted that its US operations are completely separate from the team registered in the Cayman Islands. The crypto exchange serves a global customer base. It has come under regulatory scrutiny from authorities in several countries, including the Netherlands, the United Kingdom, and Singapore.
In a Twitter space earlier in the week, CZ denounced the regulatory environment in the US, claiming there was more control of crypto companies. The Binance chief also alleged that regulators had instructed banks not to work with crypto companies or to exercise undue caution.
If CZ’s claims were factual, it could partly explain Signature Bank’s recent decision not to allow cryptocurrency customers to buy or sell amounts less than $100,000. Signature Bank was one of Binance’s main banking partners that helped facilitate US dollar payments for clients of the exchange. But following the bank’s decision, Binance was forced to temporarily stop US dollar transfers.
Regulators Take Tougher Stance on Crypto
In addition, the US Securities and Exchange Commission (SEC) began to take enforcement action against major players in the cryptocurrency industry, including the Gemini and Kraken exchanges. Additionally, New York regulators recently blocked Paxos from issuing Binance USD (BUSD), the third-largest stablecoin on the market.
US regulators have also resisted Binance US’s $1b plan to buy the assets of bankrupt cryptocurrency brokerage Voyager Digital. However, a Binance US representative recently assured that the exchange agreement with Voyager is still moving forward and in compliance with all relevant regulatory requirements. The spokesperson also clarified that Binance.com was not part of the Voyager bidding process.
The Committee on Foreign Investment in the US (CFIUS) is currently examining the Binance US-Voyager deal for potential security threats.
